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Paper LBO practice, timed and checked

A new problem each time, in round numbers. Work it on paper in ten minutes, type your six answers, then see every step worked out.

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Runs in your browser. Nothing you type is saved or sent.

Free practice

One paper LBO, ten minutes

Purchase price, sources, cash flow, exit, return. The same five steps every time.

The prompt
0:00/ 10:00

A sponsor buys a company with $40 million of EBITDA for 9x. It funds 60% of the price with debt at 10% interest and the rest with equity. EBITDA grows by $4 million a year. D&A and capex are each $8 million a year, working capital does not change and the tax rate is 25%. No debt is repaid until exit, and the cash builds up. The sponsor sells after 5 years at 9x. What are the multiple of money and the IRR?

Work it on paper, no calculator. Round where it helps.

Your answers
How it works

Three problems make the steps automatic

The method never changes. Only the numbers do.

  1. 1

    Read the prompt and start the clock

    Each problem gives you the price, the debt, the growth and the exit, in round numbers. You have ten minutes, the usual length of a paper LBO in an interview.

  2. 2

    Work it on paper

    Purchase price, then debt and equity, then the cash the company builds each year, then the exit value, then the return. No calculator.

  3. 3

    Type six numbers and check

    You see which steps were right, then the full worked answer with the year-by-year table. Take a new problem and do it again until the steps are automatic.

Keep going

Learn the method, then say it out loud

Read the worked examples, see example answers, or practice with the AI interviewer.

FAQ's

Frequently Asked Questions

Everything you need to know about Soreno, answered in one place.

A leveraged buyout worked out by hand in an interview, usually in 5 to 10 minutes. You are given the entry price, the debt, a few operating assumptions and the exit, and you work out the sponsor's multiple of money and IRR.
Do many short problems on paper against a clock, in the same five steps every time: purchase price, sources, cash flow, exit, return. This page gives you a new problem each time with round numbers, a ten-minute clock and the full worked answer.
Dollar figures within 2%, the multiple within 0.1x and the IRR within 2 points count as right. In an interview you estimate the IRR from the multiple: over five years, 2x is about 15%, 2.5x about 20% and 3x about 25%.
It keeps the arithmetic doable by hand: interest stays the same every year and the cash simply builds up, which is netted against the debt at exit. Many interview prompts use this version. The worked examples article also shows a problem where cash repays debt each year.
No. The problems are generated in your browser from a template written by Soreno, with round inputs. They are practice for the method, not a firm's questions.
No. The tool runs in your browser. Your answers and times are not stored or sent anywhere, and you do not need an account.
Every plan starts with a 7-day free trial that includes 2 mock interviews and 3 drills. After that, plans are $199 a month or $349 a year, and weekly from $64. See the pricing page for details.

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